People in the city of Maurus have a flatter demand curve for television sets than people in the city of Sienna. It can be concluded that a producer of television sets can price discriminate by charging a higher price in Maurus than in Sienna
Indicate whether the statement is true or false
T
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A hypothetical open economy has a marginal propensity to import (MPI) equal to 0.2 and a marginal propensity to consume equal to 0.7. Assume that the economy is initially in equilibrium. Refer to Scenario 10.2. What is the marginal propensity to save of this economy?
a. 0.2 b. 0.3 c. 0.7 d. 0.9 e. 0.6
The rationale behind patents is that if inventors and artists cannot secure the returns from successful projects, fewer new inventions and works of art will be produced
Indicate whether the statement is true or false
Paying interest on the reserves of commercial banks kept with the central bank allows the Fed to essentially place a floor on the federal funds rate
a. True b. False Indicate whether the statement is true or false
Jay and Joyce meet George, the banker, to work out the details of a mortgage. They all expect that inflation will be 2 percent over the term of the loan, and they agree on a nominal interest rate of 6 percent. As it turns out, the inflation rate is 5 percent over the term of the loan
a. What was the expected real interest rate? b. What was the actual real interest rate? c. Who benefited and who lost because of the unexpected inflation?